Approaches to Value Investing

There are two ways to approach value investing. One is to look for situations in which a company is selling far below itsintrinsic value, and buy it with the hope that the rest of the market will realize its value within a few years. The other is to buy great businesses, even when they don't seem inexpensive, with the expectation that they will be able to consistently build value over many years. The ideal situation is when a company fits in both categories, although this is extremely rare.